Franklin Templeton Gets SEC Green Light for Blockchain Money Fund Investments
Franklin Templeton has received SEC approval to allocate cash from its funds into its blockchain-based tokenized money market fund, with regulators confirming no enforcement measures will be taken.
The asset management giant Franklin Templeton has obtained regulatory approval to allocate investments into its blockchain-native money-market fund operating under designated safeguards, exempting it from traditional physical custody requirements.
In a no-action letter released Wednesday, the Securities and Exchange Commission (SEC) confirmed it will refrain from pursuing enforcement measures against Franklin Templeton fund managers who choose to invest cash holdings in the Franklin OnChain U.S. Government Money Fund, a tokenized vehicle that generates interest through investments in US government securities while targeting a steady $1 per share valuation.
The regulatory green light also extends to the company's affiliated transfer agent, Franklin Templeton Investor Services (FTIS), permitting it to serve in a custodial capacity for the tokenized assets and maintain control of their private keys without complying with conventional physical-custody requirements. This decision follows Franklin Templeton's official no-action request letter submitted earlier the same Wednesday.
According to data from RWA.xyz, Franklin Templeton manages $2.5 billion in onchain assets across its tokenized fund offerings, positioning the firm as the fifth-largest tokenized asset manager in the marketplace.
In June, the asset management behemoth established a specialized crypto division and completed the acquisition of crypto asset manager 250 Digital, marking significant steps in its strategic expansion into cryptocurrency and tokenization initiatives.
The SEC's correspondence outlined 12 specific conditions that must be met, including mandates for Franklin Templeton to implement systems that block unauthorized transaction instructions, and requirements for FTIS to establish administrative safeguards, such as capabilities to correct, freeze, migrate or restore digital records.